With a residential leasehold property in Bickley, you are in fact renting it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater notably when there are less than 80 years remaining. Residents in Bickley with a lease nearing 81 years unexpired should seriously think of extending it without delay. Once a lease has less than 80 years remaining, under the relevant Act the landlord can calculate and charge a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Retaining our service will provide you increased control over the value of your Bickley leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Oscar, started to get near to the eighty-year threshold with the lease on his leasehold flat in Bickley. Having bought his property two decades ago, the lease term was of no interest. Luckily, he noticed he needed to take steps soon on a lease extension. Oscar was able to extend his lease at the eleventh hour in January. Oscar and the landlord ultimately settled on a premium of £5,500 . If he not met the deadline, the amount would have escalated by at least £900.
In 2009 we were contacted by Dr Sophia Collins who, having completed a garden flat in Bickley in March 1996. We are asked if we could approximate the premium would be to extend the lease by ninety years. Comparable residencies in Bickley with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 collected monthly. The lease expired in 2102. Given that there were 77 years as a residual term we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Bickley residence is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case affected 1 flat. The unexpired term as at the valuation date was 50.57 years.